As we navigate through this earnings season, there is a glimmer of hope for the often overlooked sector of the financial industry. Wolfe Research’s technical analyst, Rob Ginsberg, has shed light on the potential breakout of the Global X FinTech ETF (FINX) in a recent note to clients. Despite a history of underperformance compared to the broader market, FINX is now in a prime position for a resurgence.
With the bulk of major bank earnings announcements already behind us, the focus is shifting towards fintech and financial services companies. This upcoming week and the next could be crucial for the sector’s reacceleration. The FINX ETF, in particular, has been consolidating its position over the past two years and is currently at a pivotal point where its setup could either flourish or falter.
Ginsberg highlights several positive technical signals for the FINX ETF. The upward trend since the lows of October is a promising sign, indicating resilience in the face of market challenges. Moreover, the trendline support has so far proven to be a reliable foundation for the ETF’s performance.
While the outlook for FINX appears optimistic, there are still potential downside risks to consider. Earnings reports from financial technology companies could impact the fund’s trajectory, especially given the current market uncertainties. Additionally, the relatively high expense ratio of 0.68% for the ETF might deter some investors from fully committing to it.
The FINX ETF stands at a crossroads, with the potential for a significant breakout in the financial sector. As we await the upcoming earnings reports from the top holdings in the fund, investors are advised to proceed with caution. The technical signals are encouraging, but market conditions remain unpredictable. Keeping a close eye on the performance of FINX in the coming weeks could provide valuable insights for those looking to capitalize on the evolving landscape of the financial industry.